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I understand that if you are carrying passengers and getting paid, then you have to have a commercial license.
What about this scenario? I have a PPL (Private Pilot License). My friend owns a company that owns a plane. If I fly him and/or his employees around, and am not being paid for the time and just doing out of the goodness of my heart, is that okay?
I'd say you'd be on thin ice with this. The principle is that private pilots cannot be compensated for their flying, with very few exceptions. That doesn't necessarily mean getting paid to fly, it can mean having the expenses of the flight given to you in some way.
Say you take 3 friends on a trip, and your friends pay all the costs. You'd be in violation of FAR 61.113 because you haven't paid your share, in other words you've received compensation. You need to pay 1/4 of the costs of the trip.
In another case you are going on a business trip and decide to fly yourself and your employer pays all the expenses. This is legit because flying is incidental and not the purpose of the trip.
In the case you are stating you have no reason to be flying the airplane other than the flight itself, therefore flying for free means you are receiving compensation and a violation of FAR 61.113.
Note other countries may vary, the UK is extremely similar to the US on this, as are most European countries, I can't speak for anywhere else.
The answer depends on the reason why you are flying your friend and his employees around. You don’t state whether or not your friend employs you in his company, but from the wording of your question I would guess that is not the case.
IF you were employed by your friend, and IF the flight was “only incidental to that business or employment, AND the aircraft does not carry passengers or property for compensation or hire” then you may act as pilot in command AND receive compensation. 61.113(b), (1) & (2) This is the only scenario where a Private Pilot may actually be compensated.
However, if you are flying them around for fun, “out of the goodness of your heart”, then you would fall under 61.113(c) and would need to “not pay less than the pro rata share of the operating expenses.”
Don’t mix the subsections of 61.113 together, they describe distinctly different scenarios. Being the recipient of free flight time is not the same thing as being compensated to fly. Reference subsections (d) and (e).
For example, the Civil Air Patrol has many members with a PPL who join not only out of a sense of Civic duty, but to be able to fly without the costs of renting or owning an airplane. They are not compensated for their volunteer service, but if they are flying a CAP funded mission they receive free flight time.
The privelages of a CPL are it allows you to fly an aircraft CARRYING PASSENGERS OR PROPERTY FOR COMPENSATION OR HIRE under specific circumstances governed under 119.1 of the FARs. The FARs do, however, allow a private pilot to fly for compensation or hire, only if the flight is incidental to the pilot’s employment and it does not carry passengers or property for compensation or hire. See FAR 61.113. The other requirement here is that you the pilot are required to pay no less than a pro rata share of the aircraft’s operating expenses eg fuel, oil, parking fees, etc.
Be careful, as well, to conform with the terms of AC 120-12 when discussing this in order to comply with the FAA’s rules concerning holding out for common carriage, as this can get you into trouble very quick if you don’t
